Record High House Prices in US Strain Annual Budgets: New Analysis

The dream of homeownership is becoming increasingly out of reach for many Americans as record-high house prices continue to strain annual budgets. A new analysis reveals the extent of this financial pressure, highlighting the challenges faced by prospective buyers and current homeowners alike.

The Numbers Don't Lie: Housing Affordability Crisis Deepens

Right now, housing is not affordable for a record number of Americans - yet again. And this year's numbers break a record set last year. They show that both renters and aspiring homeowners are feeling the pinch. The latest data reveals that the average monthly price of purchasing a house in the US has surged to an all-time high of $2,748, marking a staggering 90% increase since 2025. The numbers: Home prices in the 20 biggest U.S. metros set yet another record high in August, but have decelerated significantly under the weight of high mortgage rates.

Home Prices Reach New Heights in Early 2025

On the for-sale side, home prices reached a new all-time high in early 2025 despite persistently elevated interest rates, rising at an annual rate of 6.4 percent in February. Homes in America are the most expensive they’ve ever been, according to one measure. The median price of a previously owned US home climbed for the eleventh consecutive month. That’s due to two key factors: Home-sale prices are up 1.8% year over year, and the weekly average mortgage rate is 6.76%, down slightly from mid-April but elevated well above historical averages.

Undersupply and Elevated Interest Rates Compound the Problem

Record-high home prices fueled by persistent undersupply and exacerbated by elevated interest rates put a strain on buyer activity across the country and make housing less accessible. The combination of limited inventory and high borrowing costs creates a challenging market for first-time homebuyers and those looking to upgrade or relocate.